172 



4) AMEND PURPA AND THE CLEAN AIR ACT TO DEFINE FXTEL 



SWITCHING AS A KKSOURCE: Under PURPA, electric udliucs arc 

 required to purchase cost-effective resources provided by other parties. By 

 defining fuel conversions as a resource eligible for avoided cost or 

 competitive bid pridng under PURPA, and a resource eligible for the 

 sulphur-bank credits provided by the Clean Air Act, the Congress could 

 encourage and require electric utilities to consider fuel conveiaons alons 

 with generating resources. 



WHAT CAN THE GAS ITTOUSTRY DO? 



It MTOuld be inappropriate to place the entire burden of a more ef&ciem fuel 

 choice stmts/ on the electric utility industry. The gas industty also has a considerable 

 role to play, The role of the gas iudustiy should be to ensure stable snppUes, 

 predictable pricng, and efficient use of its product. 



1) ENSU RE TH AT APPLIANCES INSTALLED ARE EFFICIENT AND 

 COST-EFFECnVE; Fuel conversion naeans ln?ira!llTig new applianoa, and 

 gas appliances last a long time. Aitfinrion should be given to ensure that 

 furnaces and water heaters are effidem. It is possible to 'oversell" 

 cfSdency, however — 90+ efficient fumaces are very cost-effective in large, 

 single-f^ily homes in Missoula, but the cost premium over 85% effidettt 

 uuts may not be justified in small homes in Eugene. 



2) SECURE LONG-TERM GAS CONTRACTS: One obstacle to conversion 

 is uaccrtaioty about long-nm costs for natural gas. By securing long-term 

 contracts, gas utilities can stabilize the price of gas. 



3) REVIEW LINE EXTENSION POLICIES: Gas line extension policies 

 need to be reviewed to ensure that customers are allowed utUity-Hnanced 

 line extensions whenever it is cost-effective. Gas utilities should receive 

 contributions &om the electric system associated vnth the edacity thai fuel 

 conversions free up on the electric system. 



CONCLnsiON 



The poteatial regional savings from more efficient fuel choice are rignificartt 

 Unless BPA, the region's public utilities, the Power Planning Coimdl, and the gaa 

 utilities work together, a tremendous opportunity may be lost. The potential savings - 

 $100 miflion to S200 million per year - will help to strengthen the regional economy. 

 It's T<"'^ for the territoriality of electric utilities - and the negativism toward 

 conservation of gas utilities — to give way to a new era of cooperation and econDtnic 

 savings. 



Testimony of Jim ^ ^■'^r Committee on Small Business 



June 3. 1993 p»6<= '' 



